Summary: Mrs B says the Council introduced a trial scheme which gave some homeless applicants priority over others on the housing register without following the right process. There was fault in how the Council introduced the temporary arrangement and in its failure to document the decision-making process properly. That did not cause any personal injustice to Mrs B. A reminder to officers of the process they need to follow when making these types of decisions is satisfactory remedy.

The complaint

1. The complainant, whom I shall refer to as Mrs B, is represented by a local voluntary group which complains on her behalf. Mrs B complained the Council:
• introduced a trial scheme to allocate band 2 priority on the housing register to new homeless applicants who accepted private rented properties, in contravention of its housing allocations scheme and to the detriment of other applicants in band 3;
• in introducing the scheme the Council failed to publicise it or notify those in band 3; and
• failed to follow the right decision making process before implementing the scheme.
2. Mrs B says the Council's actions mean she, as well as others in temporary accommodation and those placed in band 3, will have to wait longer before being allocated a property. Mrs B also says the Council’s actions have caused her and others on the housing waiting list significant distress and confusion and have led to a loss of trust and confidence in how the Council manages its housing register.

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The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. If we are satisfied with an organisation’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

5. As part of the investigation, I have:
• considered the complaint and Mrs B's comments;
• made enquiries of the Council and considered the comments and documents the Council provided.
6. Mrs B and the organisation had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Government guidance

7. The Government has issued the ‘Allocation of accommodation: guidance for local authorities.’ (the guidance). This refers to section 166A(1) of the Housing Act 1996 (the Act) which requires authorities to have an allocation scheme for determining priorities and for defining the procedures to be followed in allocating housing accommodation and says they must allocate in accordance with that scheme. It says all aspects of the allocation process must be covered in the scheme, including the people by whom decisions are taken.
8. The guidance says in framing their allocation scheme to give effect to section 166A(3) of the Act, housing authorities must give reasonable preference to applicants who fall within the categories set out in section 166A(3) of the Act, over those who do not. That includes people who are homeless.
9. The guidance says when an alteration is made to a scheme reflecting a major change of policy, an authority must ensure within a reasonable time those likely to be affected by the change have the effect brought to their attention, taking such steps as the housing authority considers reasonable. A major policy change would include, for example, any amendment affecting the relative priority of a large number of applicants or a significant alteration to procedures.
10. The guidance says the Act requires authorities, before adopting an allocation scheme, or altering a scheme to reflect a major change of policy, to:
• send a copy of the draft scheme, or proposed alteration, to every private registered provider with which they have nomination arrangements, and
• ensure they have a reasonable opportunity to comment on the proposals.

The Council’s allocations scheme

11. Section 1.1.10 of the Council’s allocations scheme (the scheme) says:
• “Any provision in this scheme may be waived in exceptional and limited circumstances and at the discretion of the appropriate senior officer with delegated authority a direct offer may be made outside of the housing allocations scheme. This would normally require a full report of the circumstances of the individual case to be prepared for the consideration of the delegated officer.”
12. Section 1.1.13 of the scheme refers to The Localism Act 2011 introducing significant amendments to Part 6 of the Act. It refers to councils having the power to discharge the main homelessness duty with an offer of private rented accommodation, which it made clear the Council would operate. It says such provision does not involve an allocation within the provisions of Part 6 of the Act and applicants who are housed through sections 148 and 149 of the Localism Act will be placed in priority Band 3.
13. Section 3.2.1 of the scheme says whilst the majority of applicants will be housed through the choice based lettings scheme, the Council may make direct offers in certain circumstances, namely to those to those applicants who have been assessed in accordance with the allocations scheme and who are therefore in urgent housing need, referring back to section 1.10 of the scheme.
14. The scheme sets out which band an applicant will be placed in. It says those who are homeless and toward whom the Council has a statutory duty to accommodate under Part 7 of the Act will be placed in band 3. It says applicants who accept a property in the private rented sector through sections 148 and 149 of the Localism Act will also be placed in band 3.
15. Section 5.11 of the scheme notes there may be exceptional circumstances where the only way an urgent housing need can be resolved is through management discretion. It says this type of move will be kept to a minimum, and all such landlord request transfers will be authorised by the Head of Operations. Section 5.11.2 of the scheme makes clear these cases will be placed into Band 1 and if all other housing options have been explored may result in a direct offer of accommodation.

What happened

16. At the time of the events complained of Mrs B was homeless and had been placed in temporary accommodation by the Council. Mrs B was able to bid on properties under the Council’s choice based lettings scheme and was in band 3.
17. Between 10 July 2019 and 31 December 2020 the Council introduced a discretionary arrangement under which it offered new homeless applicants the opportunity to accept a private rented property and be placed in band 2. The Council said it introduced that discretion in line with section 1.1.10 of its scheme. Under that discretionary arrangement the Council awarded 378 households band 2 status. Since July 2019 the Council has housed 213 of those applicants under the choice based lettings scheme and 165 remain on the housing register in band 2.
18. Mrs B accepted an offer of accommodation under the Council’s choice based lettings scheme in August 2022. Mrs B moved into her new, permanent Council home in September 2022.
19. The Council discontinued use of this discretionary arrangement in December 2020. However, the Council is currently consulting on some revisions to the allocations scheme. Those revisions include the provision for homeless applicants who accept private rented accommodation to receive band 2 priority. It is unclear whether this part of the proposal will be incorporated in a future update to the scheme.

Analysis

20. Mrs B says the Council introduced a trial scheme to allocate band 2 priority on the housing register to new homeless applicants who accepted private rented properties, rather than placing them in band 3 where homeless applicants are normally placed. Mrs B says because the Council introduced that arrangement and did not offer it to existing homeless applicants in band 3 it allowed new homeless applicants to queue jump ahead of those already registered in band 3. Mrs B says the Council awarded band 2 status to 378 new homeless applicants that accepted private rented accommodation which, in effect, created a separate criteria within band 2 without following the right process.
21. The Council accepts it introduced a discretionary arrangement between 19 July 2019 and 31 December 2020 which allowed new homeless applicants to be placed in band 2 if they accepted a property in the private rented sector. The Council says its current allocations scheme provides it with the discretion to introduce such an arrangement and says it was approved by the former head of housing solutions services. The Council says it introduced this discretionary arrangement to incentivise households to seek accommodation in the private sector independently. The Council says the arrangement was only specifically offered to new households that approached the Council as homeless or threatened with homelessness between July 2019 and December 2020. The Council says existing homeless households in temporary accommodation were only made aware of the arrangement if they proactively contacted the Council to say they wanted to move into private accommodation.
22. I am concerned the Council has provided no documentary evidence to show how the decision to introduce this discretionary arrangement was reached. The Council has provided a copy of a report and decision making documents for the decision to offer suitable private rented tenancies to any homeless household where the law allows. However, this relates to the power introduced under the Localism Act, which I refer to in paragraph 12. Nowhere in the Council’s report or decision-making document on that does it refer to the proposal to introduce an arrangement to allow new homeless applicants to be placed in band 2 if they accept a private sector property. As the Council has not provided any evidence to show how the decision to exercise this discretion was made I am not satisfied the decision was reached properly. Nor am I satisfied the Council, in introducing this new arrangement, properly considered the implications of it for existing band 3 applicants. Failure to keep documentary records to show how the decision was made and what was taken into account is fault.
23. The Council says its existing scheme provides it with the power to introduce this discretionary arrangement. In responding to our enquiries the Council has referred to various sections of its allocations scheme, which I will address in this statement. As noted in the previous paragraph though, as there are no documentary records detailing the decision making process I cannot say whether the matters the Council now raises were matters taken into account when the decision to introduce the discretionary arrangement was made.
24. The first section the Council refers to is section 1.1.10 of the scheme, which I outline in paragraph 11. This is also the paragraph the Council quoted in its response to the complaint submitted by the voluntary organisation on behalf of Mrs B. The Council says this section of its scheme gives it the discretion to introduce the arrangement.
25. Section 1.1.10 of the scheme provides for the Council to waive any provision in its scheme in ‘exceptional’ and ‘limited’ circumstances. That section goes on to refer to a senior officer having the discretion to make a direct offer outside the scheme which would normally require a full report of the circumstances of the individual case to be prepared. There is no evidence the Council properly considered whether section 1.1.10 provided it with the power to introduce an increase in banding for a section of homeless applicants before it introduced the discretionary arrangement. I am concerned about that because I do not consider 378 households ‘exceptional’ or ‘limited’. Nor were any of those applicants provided with a direct offer and there is no evidence the Council completed a report on the circumstances of each individual case before agreeing to increase the banding. Instead, the Council applied the discretion to a specific group – new homeless applicants. That is not in accordance with paragraph 1.1.10 of the scheme and I have seen no evidence to show the Council properly considered that section.
26. In response to our enquiries the Council says it considers the discretionary power is provided for in section 1.1.13 of the scheme. As mentioned in paragraph 12 that section of the scheme permits the Council to discharge its homelessness duties by placing an applicant in the private rented sector. However, paragraph 1.1.13 does not make any comment on the priority to be given to homeless applicants placed in the private rented sector. I am not satisfied the Council properly considered whether this section of the scheme provided it with the discretion to introduce the arrangement.
27. In response to our enquiries the Council said due to the complexities of circumstances arising in society and individual housing circumstances not all households will fall into a specific band. The Council says section 3.2.1 of its scheme covers this. I refer to section 3.2.1 of the Council’s scheme in paragraph 13. I agree under that section of the Council’s scheme it can provide offers of accommodation outside the choice based lettings scheme for those in urgent need. However, this refers to the Council’s power to make a direct offer. For the 378 applicants the Council placed in private rented accommodation it did not provide them with a direct offer. Instead, it allocated those applicants band 2 status. I therefore do not consider paragraph 3.2.1 gives the Council the power to introduce the discretionary arrangement in place between July 2019 and December 2020. I have seen no evidence to suggest the Council properly considered that point.
28. The Council has also referred to section 5.11.1d of its scheme as providing it with the discretion to introduce this arrangement. I refer to that section of the Council’s scheme in paragraph 15. I am satisfied that section of the scheme provides for the Council to exercise discretion in exceptional circumstances where that is the only way an urgent housing need can be met. Having considered the content of that section though I am not satisfied this applies to homeless applicants who accept private rented accommodation. In any event, section 5.11.1d must be read in conjunction with the following paragraph, 5.11.2. This makes clear the cases for which discretion is exercised under section 5.11.1d will be placed into band 1 or made a direct offer of accommodation if all other housing options have been explored. I do not consider the Council’s discretionary arrangement falls within these paragraphs given the homeless applicants accepting private rented accommodation were placed in band 2, rather than band 1 and were not given a direct offer. I have seen no evidence the Council properly considered that point.
29. I am also concerned that in introducing this discretionary arrangement the Council has potentially introduced a major change of policy without going through the process set down in Government guidance, which I refer to in paragraphs 9 and 10. I would have expected the Council to have considered whether the proposal was a major change of policy which required an amendment to the scheme given the introduction of the arrangement allowed 378 homeless applicants to receive greater priority than other homeless applicants and others in band 3. Failure to consider that point is fault.
30. I note the Council is now consulting on revisions to the scheme. If the Council amends the scheme in the way in which it intends it will allow homeless applicants who accept private rented accommodation to receive band 2 status. I welcome the fact the Council is now consulting on changes to the scheme. However, I consider this process should have been completed by the Council before it introduced the arrangements in 2019.
31. I am also concerned the Council only made the scheme available to new homeless applicants between July 2019 and December 2020 or existing homeless applicants that independently contacted the Council to ask for private rented accommodation. The Council did not advertise the scheme to those already homeless and in temporary accommodation, which included Mrs B. The Council says it intended to run workshops and send a mailout to existing households in temporary accommodation but due to the increase in homeless applicants as a result of the COVID-19 pandemic it limited the Council’s ability to make contact with those households.
32. I do not consider that argument is credible. The Council introduced the arrangement in July 2019 and the COVID-19 pandemic did not affect the UK until March 2020. The arrangement had therefore already been in place for eight months before COVID-19 restrictions were introduced. I therefore see no reason why the Council could not have advertised the arrangement to existing homeless households in temporary accommodation. Failure to do that meant the Council gave additional priority to a section of homeless applicants, to the detriment of those already in temporary accommodation. As I have made clear though, the Council should in any event have considered whether it had the power to introduce this arrangement under its existing scheme and there is no evidence it did so before it was introduced.

Injustice

33. In terms of an injustice, I note Mrs B has now secured accommodation under the Council's scheme. The Council says this is evidence the arrangement did not result in any injustice. That is likely to be the case for Mrs B, particularly as she has confirmed if she had been offered the option of accepting a private rented property and being placed in band 2 she would have been nervous about taking part as it would have been a risk to give up her rights. I therefore consider it likely, on the balance of probability, if the Council had offered Mrs B the opportunity to take part in the scheme she would not have accepted it.
34. However, there remain 165 applicants in band 2 as a result of the arrangement the Council introduced. Those 165 applicants will retain additional priority over other homeless households, as well as everybody else in band 3, until they are rehoused on the Council's housing register. If any of those applicants apply for the same property as a homeless applicant in band 3, or any other applicant in band 3, they will continue to receive priority over those other applicants despite the scheme making clear they should also be in band 3. I have therefore considered whether those remaining in band 3 have suffered an injustice as a result of the Council introducing an arrangement without going through the right process.
35. I accept if the Council had followed the right process it may still have introduced the same scheme and incorporated it into its allocations policy, as it is now seeking to do. That would mean the effect on those remaining in band 3 would have been the same but not due to any fault by the Council. I therefore consider any wider injustice to others is speculative in that, had the Council adopted the policy correctly, it might well have resulted in the same decisions and outcomes. In those circumstances I make no recommendation for a personal remedy either for Mrs B or those remaining in band 3. However, to address the fault in this case I recommended the Council remind officers with responsibility for making delegated decisions of the need to ensure decisions on any discretionary elements within the Council's allocations scheme are properly considered and documented. I further recommended where the Council is proposing any changes to the allocations scheme which would result in a different banding for a group of applicants it should consider whether this constitutes a major policy change and, if it does, follow Government guidance in consulting on the proposed changes before they are introduced. The Council has agreed to my recommendations.

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Agreed action

36. Within one month of my decision the Council should:
• remind officers with responsibility for making delegated decisions of the need to ensure decisions on any discretionary elements within the Council’s allocations scheme are properly considered and documented; and
• where any proposed changes to the allocations scheme would result in a different banding for a group of applicants the Council should consider whether this constitutes a major policy change and, if it does, follow Government guidance in consulting on the proposed changes before they are introduced.

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Final decision

37. I have completed my investigation and found fault by the Council but no injustice to Mrs B.

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Investigator's decision on behalf of the Ombudsman